D.A. to File Suit Against O.C. Property Manager : Investigation: Former tenants have accused the Garden Grove firm of failing to return security deposits.

The Orange County district attorney’s office announced Monday that it intends to file an unfair-business-practice lawsuit against a property management firm accused of denying refunds of apartment security deposits to hundreds of Orange County renters.

“The extent of the problem appears to be major . . . and we certainly plan to go to court this week,” said Deputy Dist. Atty. Jan Nolan, who is in charge of the office’s consumer and environmental protection unit.

On Sunday, The Times reported that at least 113 small-claims suits had been filed against Elerding Properties of Garden Grove and that the Marine Corps had taken the extraordinary step of removing the firm’s 10 Orange County and two Los Angeles County complexes from its approved-housing list.

Officials with the firm, operated by the sons of late Newport Beach millionaire Charles E. Elerding Jr., have repeatedly declined to comment and did so again on Monday. Arthur Morello, an attorney for the corporation, also declined to say if officials were aware of the district attorney’s investigation.

Prosecutor Nolan said investigators opened their inquiry two weeks ago upon receiving two complaints from tenants who accused the firm of failing to refund their security deposits--typically between $300 and $650--as required by state law.

So far, Nolan said, investigators have secured certified copies of at least 50 unsatisfied default judgments against Elerding Properties.

“The only reason we have not been to court is because it takes some time to get these certified judgments from the various (small-claims) courts,” she added.

Nolan said the district attorney will seek restitution for the affected tenants as well as at least $125,000 in penalties--$2,500 for each case in which court judgments are yet to be paid. “We want to get those (default judgments) satisfied for those former tenants,” she said.

Several hundred other former renters have not filed suit to recover their security deposits but have written letters of complaint to Elerding Properties, according to two company employees who asked not to be identified for fear that they will be fired.

Nolan said that she expects many of those potential victims to call the consumer protection unit and that, “if and when we are able to secure restitutions, they will benefit.”

In addition to seeking restitution for the affected renters, Nolan said, prosecutors will ask a Superior Court judge to grant a temporary injunction restraining Elerding Properties and its officials from continuing to deny bona fide refunds to former renters.

“The preliminary injunction would force (Elerding Properties) to return the deposits in a timely fashion,” Nolan explained.

The Orange County complexes owned by Elerding Properties include: Amberwood, in Buena Park; Casa Madrid, in Cypress; Mountain View Apartments and Villa Viejo Apartments, in El Toro; City Park Plaza, in Garden Grove; Huntington Apartments and Bahia Puerto, in Huntington Beach; Tustin Arms Apartments, in Orange; and Cerritos Apartments and Pine Tree Apartments, in Stanton.

The Times also reported that the Orange County Environmental Health Division had received at least 43 complaints since January of last year that substandard housing conditions exist at some of the firm’s apartments.

Nolan said investigators will also look into health and safety complaints, adding, however, that the district attorney’s office is limited in the kind of action it can take in such matters. But, she said, “we will contact the proper regulatory agencies and have them do it.”